booz&co perspective organizational culture final

Booz & Company

A Perspective on Organizational Culture

New York Overview Document

This document is confidential and is intended solely for the use and information of the client to whom it is addressed.

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Contents

Organizational Culture — what it is and why we should care

What we believe to be true about culture

Our culture methodology

Client examples

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Culture matters — it can make or break your company

“Everything I do is a reinforcement, or not, of what we want to have happen

culturally. … You cannot delegate culture.”

Steve Ballmer, Microsoft CEO

“If you get the culture right, most of the other stuff will

just take care of itself.”

Tony Hsieh, Founder and CEO of Zappos.com

“Fixing the culture is the most critical – and most difficult – part of a corporate

transformation.”

Lou Gerstner, retired CEO of IBM

“If you don’t maintain Southwest’s culture, you don’t have anything

special.”

Colleen Barrett, former President Southwest Airlines

Sources: Steve Ballmer speech at Stanford Business School, March 15, 2007 (www.youtube.com/watch?v=W-BdCpZjZxU); IBS CDC case, “Designing an Organizational Culture: Tony Hsieh Wrapping Zappos’ Organisational Culture?”, (http://www.ibscdc.org); Adolf Haasen and Gordon F. Shea, New Corporate Cultures that Motivate, Westport, CT: Praeger, 2003; Willie Pietersen, Reinventing Strategy, New York: John Wiley and Sons, 2001

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Studies show that culture correlates with high performance

At its best, culture can be an asset that enables, energizes, and enhances human behavior — and when wisely utilized, it can accelerate and sustain business results

At its worst, culture can be a drag on productivity and emotional commitment. It can lead to underperformance and undermine long-term success

In either case, an organization’s culture can be consciously steered and influenced to either enhance the impact it has on performance or reduce the resistance it can have on behavioral change

Culture is a potential “asset” of all organizations. It develops whether

intended or unintended, actively directed, or left to happenstance.

Relation Between Results of an Organizational Culture Analysis and Company Peer Performance

– 26 Companies –

Organizational Culture Score2)

Higher Performers

“Middle of the Road”

Underperformers

Indexed EBIT Performance1)

-1

-0,8

-0,6

-0,4

-0,2

+0,2

+0,4

+0,6

+0,8

+1

60 65 70 75 80 85Average

HighLow

1) Company Performance relative to EuroStoxx Sectorindex. Result >0 means outperformance. Considered time interval: 10 years2) Results of an analysis of company values performance, recently researched jointly by Bertelsmann foundation and Booz & Company

Culture and Business Performance

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Culture is as critical as strategy and operating model —and all three must be in sync

Operating Model Culture

Coherent BusinessStrategy

How will we compete?

How a Company Wins in the Market

Value creation choices articulated in mission, vision, targets, and business objectivesA company’s products, brands, and customer relationshipsAll centered on a coherent set of capabilities

How will we “run the business”?

How will we energizeour people?

Structural breakdown between corporate, BUs, and support functions Responsibilities and decision rights across groupsPerformance measuresCritical systems and processes

Behavioral normsLong-standing attitudes and beliefsLived valuesAccepted style and approach –common understandingSymbols – visual identifiers and stories

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So what is this fuzzy “culture thing,” really?

We Say an Organization’s Culture is …

…its self-sustaining patterns of behaving, feeling, thinking, and believing -- that determine “how we do things

around here”

“Self-sustaining” because culture has inertia — without a really strong and persistent force, it won’t change its course

“Patterns” because it is ingrained, repetitive elements that make up culture

“Feeling, thinking, and believing” because both the emotional as well as the rational side matter

Booz & Company Definition of Culture

“Behaving” because what people feel, think, and believe is reflected in — and shaped by — their daily behaviors

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There are three basic situations when culture needs to be addressed

Culture “lags” market realities

Situations where some elements of an established culture have not kept pace with changes in business priorities

Some (but not all) elements of the culture are hindering company’s performance.

You need to work “with and within” your existing culture to change the “critical few”behaviors.

Cultured can be “THE KEY” to competitive advantage

Culture can become a “secret weapon” that makes extraordinary things happen. We see this phenomenon in most peak-performing enterprises

In those cases, the goal is not to change culture but rather to understand, activate and utilizeculture by capitalizing on its perhaps latent emotional power

Culture is “THE PROBLEM”

When your culture has become completely inappropriate for your strategic challenge or out of sync with your operating model, you need to consider replacing or drastically overhauling it

This invariably requires the “help”of a major marketplace upheaval that serves as a catalyst

However, even here elements of the “old culture” can be utilized to accelerate key behavior changes

The Appropriate “Interventions” Differ When …

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Getting at culture is hard — and many traps must be avoided

Typical Culture Traps and Realities

The reality: It takes a lot more than a clairvoyant CEO

The trap: “Blame the leader” where the Board assumes that replacing and getting

the right top leader can make everything happen“We have to change the CEO”“Bringing in an outsider to shake things up is the only plan”“Culture is the primary job of the CEO”

The trap: “The devil made me do it” where culture becomes the primary, all-purpose

excuse for performance shortfalls“Our process culture makes us unresponsive and inhibits innovation”“Our engineering culture makes us over-analyze everything”“Our bureaucratic culture derails decisions and slows execution”

The reality: Culture is rarely the only “villain,” though it is often a “partial conspirator”

The trap: “Culture is the soft side of organization” where culture change becomes mostly about

persuading people to change attitudes and beliefs“It’s all about how people feel and how to change those feelings”“Compelling and consistent communication will change individual values, beliefs, and actions”“Cultural efforts are the province of HR”

The reality: You cannot delegate cultural interventions to HR

The trap: “Black cloud to white cloud” where changing the culture is viewed as an

“all or nothing” game“Our culture will take at least 5 years to change”“We need a major crisis to make that happen”“Nothing significant can change until we change the culture (completely)”

The reality: Most situations cannot wait 5 or more years for results; key changes must often happen sooner

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Contents




Client examples

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We believe there are six imperatives when addressing culture

1. The existing culture can be a powerful source of energy and influence for behavior change. Culture is rarely “all bad,” and using elements of the existing culture can help accelerate the change

2. If you don’t have to overhaul or replace a culture, don’t! A deeply imbedded culture does not change very much, very fast. Moreover, a major culture replacement requires extensive programs and structural redesign. Major culture overhaul or replacement efforts are hard to do and often fail. So, only attempt a major overhaul if really necessary; for example, in the face of a major “dislocation” event or crisis. But in most cases you don’t need — and certainly don’t want to incur the risks of — a major overhaul of your culture

3. Start with changing behaviors, not mindsets. It is much easier to “act your way into new thinking” than to “think your way into new actions.” Recurring and consistent performance results from behavior change will lead to lasting changes in the way people feel, think, and believe in the long run

4. Focus on changing only the few critical behaviors at different levels within key populations. This is less disruptive than attempting wholesale change — and certainly more manageable and sustainable over time

5. Use viral (i.e., cross-organizational) methods to motivate behavior change, not just formal top-down programmatic methods. Storytelling and a shared common language can be powerful. Peer-to-peer and cross- organizational interactions (networks, communities) can enable and accelerate formal change methods

6. Mobilize both rational and emotional forces to reinforce the new behavior patterns and achieve lasting change. Rational guidelines and positive emotional support both matter. Psychological evidence here is compelling. Both the rational and the emotional elements need to “jump together” to yield sustainable change

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1) The existing culture can be a powerful source of energy and influence for behavior change

An existing culture is usually a product of good intentionsand is rarely “all bad”

– In our experience, many senior executives intuitively understand that culture matters; few understand its true power

– Understanding “the good” about an existing culture can be a powerful accelerator of change and/or performance

When you are about to embark on a major change ortransformation effort, think first about the potential strengths in your culture today that may help you in your endeavor

– For example, a culture rooted in a deep commitment to customer service could be leveraged during a company’s efforts to improve customer retention rates by 5 percent

Using such cultural strengths can often have a positive effect much more quickly than programmatic change

– For example, informal networks such as communities of common interest offer useful options for quickly spreading new behaviors

“Always think first of culture as your source

of strength”1

Edgar Schein, MIT Professor and Expert on Organizational Culture

1: Edgar H. Schein, The Corporate Culture Survival Guide, San Francisco: Jossey-Bass, 1999

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2) If you don’t have to overhaul or replace a culture, don’t

Changing an institutional culture successfully is difficult and complex, because a deeply imbedded culture tends to evolve only slowly, if at all, and changes to ingrained attitudes and beliefs are often strongly resisted– It is analogous to ethnic or religious cultures that change over time only as repeated behavior changes lead to

results that cause deep-seated beliefs to evolve

Research suggests that between 66% and 75% of organizational culture change efforts fail– Atari’s attempt to shift its product development group from a team culture (where teamwork and group ideas were

paramount) to a performance culture (where individual performance was rewarded) hampered innovation and performance

– When Carly Fiorina initiated cost-cutting measures, acquisitions, and culture initiatives at HP, she ran up against HP’s existing culture (known as “the HP Way”), and this deeply ingrained culture impeded Fiorina’s initiatives

– Prior to Aetna’s successful turnaround between 2001 and 2005 (under John Rowe and Ron Williams), three previous programmatic efforts over the preceding decade were derailed by the so-called “Aetna-nice” culture

Thus, complete culture changes should only be undertaken when absolutely essential and must be relevant in the context of improving overall business performance and consistent with strategic imperatives – When GM faced bankruptcy it had to change substantially — changes in strategy, operating model, and cost

structures had to be accompanied by culture change initiatives– BP is likely to rigorously evaluate all aspects of its operations — including a culture that might have downplayed

the risks of offshore oil exploration — as it continues to respond and recover from the Gulf oil spill

Situations where the culture doesn’t need a full overhaul — but needs to evolve and adapt only in certain areas —occur much more frequently

Source: Survey from the Center for Creative Leadership (2008)

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3) Start with changing behaviors, not mindsets — it’s faster and

more lasting

Behaviors

Symbols

Thoughts, Feelings, Beliefs

Three Levels of Corporate Culture

Invisible Elements

Visi

ble

Elem

ents

Focus here first

Non-assigned seatingComfortable, relaxed uniformsAdvertising centered on Southwest employees

Employees’ use of humor in customer interactionsEmployees seeking faster ways to do their jobs

The overarching belief that Southwest is the low-cost airline and the customer-friendly airline

Easily identifiable markers that may be fleeting in the face of changing environmental conditionsExternally facing cues that capture the attention of customers Trying to change a culture at this level alone will not change people's beliefs or behaviors

Behavioral manifestations of learned responses that are durable but subject to adaptationPatterns of overt behaviors and interactionsIngrained approaches to performing tasks and solving problems both within and beyond the organization

Thoughts, feelings, and beliefs that are responsive to changes in behavior but difficult to influence directlyDefining stories that anchor a sense of collective identity in a common understanding For culture change to endure, these must evolve —but this can rarely be done directly

Description Southwest Airlines Example

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4) Focus only on a few critical behaviors at different levels within key populations

In most cases, you don’t need to worry about theentire culture in your organization

– Focus on those cultural elements that are most relevant to

the specific performance improvement behaviors with which

you are concerned

Not all employees in your organization are likely to be in a position to influence the relevant cultural themes

– You must first identify which groups of individuals are “carriers” of the cultural themes

– These themes are reflected in the behaviors, thoughts, feelings, and beliefs of the “carrier” group

Thinking, feeling, and believing are hard to change but ultimately need to change

Behaviors are also hard to change but a bit easier than the other three because

– You can use formal and informal mechanisms to “make” people behave differently even before they “believe”

– In doing so, people act their way to a new mindset (as opposed to the other way around)

Culture, in its essence, is individual — it is the sum of how all individuals think, feel, and behave

– Therefore, whenever we deal with culture, we have to break down culture to the person level

– Once you define who needs to adopt what kind of new behaviors, you can start to build a plan

“(Culture) is almost like having a teenager … you have to

pick your battles.”1

Carol Bartz, Yahoo! CEO

1: Carol Bartz discussion at the University of Washington, http://vimeo.com/13136019

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5) Use viral methods to create and reinforce behavior change

Sources: Leandro Herrero, L. (2008). “Viral Change: The alternative to slow, painful and unsuccessful management of change in organizations.”; David Rock, “Managing with the Brain in Mind,” 2009; David Rock, and Jeffery Schwartz, “The Neuroscience of Leadership,” 2006; Rock and Schwartz, “Why Neuroscience Matters to Executives”; Booz & Company analysis

Leading people to change their behaviors is in part difficult because change causes anxiety …

Most people experience measurable, chemical reactions in the brain when asked to change the way they behave

– This is similar to any type of “threat and reward” response

– The threat response is taxing and often leads to primal responses, making people resistant to change

Behavior change is created by focusing people’s attention on an ongoing basis on solutions requiring new behavior sets

The more frequently and closely people’s attention is focused on a particular behavior, the higher the likelihood the behaviorchange will stick

… but behavior change can be made easier when viral approaches (e.g., social networks) are usedChanges in behavior are best achieved by tapping into informal social networks of influence

A small, carefully chosen set of change “champions” spreads new behaviors from person to person through social contacts

– Behaviors are diffused through stories, role-modeling, and informal contacts

– Leadership is distributed and exercised constantly by all people who role-model the changes

– New behaviors begin to cascade through networks horizontally (as well as vertically)

– Changes spread in a network until a tipping point is reached and the new behaviors are the norm

Social networks are also often used in non-business settings to impart lasting change; examples include social action, politicallobbying, and support groups

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6) Mobilize rational and emotional forces to reinforce the new

behavior patterns and to achieve lasting changeFormula for Reinforcing Behavior Change

+ = Enables significant and

sustainable change

Understanding without acceptance will not suffice

… support the new business strategy

… impact customer retention rates

… affect their bonus eligibility

… be greeted by Wall Street

Informing employees how the change will …

… their teams, peers, and direct reports

… their ability to take pride in their work

… the firm’s standing as a corporate citizen

… their work-life balance

Addressing employees’ concerns about …

Appeals to rational forces enable understanding of

why the change is needed

Appeals to emotional forces enable acceptance of and

support for the change

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Contents




Client examples

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We favor a rigorous culture intervention frameworkB

usin

ess

Obj

ectiv

es

Culture Intervention ProgramDesign a tailored culture intervention

program using formal and informal levers, focused on changing critical behaviors

(mindset/culture change will follow)

Outcomes

People change

behaviors, mindsets

follow

Improved business

results are evident

Organization sustains the change over

time

Culture Intervention Framework

3

Formal Approaches

Informal Approaches

1

2

Culture FROM and TO

Understand the culture today and tomorrow, and identify cultural gaps and cultural strengths

Critical Few Behaviors

Identify the critical few behaviors that will make the biggest difference toward your cultural aspiration

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Understand the existing culture and articulate the aspiration

Understand the existing culture at a deep enough level — make sure you are not blindsided by superficial symbols of culture that may lead you down the wrong path– What are the strong attributes? What are the weak attributes?– Why is the culture the way it is today? How did it get there? What forces are re-enforcing it?– In which ways does the culture fit with the company’s strategy or operating model? In which ways

does it not fit?

Articulate the future cultural aspiration in a visionary, compelling, and positive way– Defining the future aspiration requires deliberate choices — you cannot just “pick all the positive

attributes” because they will often be mutually exclusive (e.g., a company competing on cost efficiency may not simultaneously be able to aspire to a high-end customer service culture)

– Senior leadership must visibly lead and represent the articulation of the cultural aspiration; however, leadership behaviors down the line must demonstrate key changes.

Based on the understanding of the existing culture and the cultural aspiration, we can then formulate the cultural themes that need to be addressed to make the aspiration a reality

Working with the cultural strengths of the existing culture will accelerate the endeavor

1 The Culture FROM and TO

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Centralized Control Points More Local Empowerment and Accountability

Multi-layered management Delayered

Unbounded Procurement Demand Management; “Good Enough”

Revenue/Top Line Focus Profitability/Bottom Line Focus

“Get What I Want” “Get What I Need” (Trade-Off Mindset)

Independent Businesses Interdependent

Structure

Complex Solutions Streamlined Services

Process

CultureSiloed thinking Enterprise-Wide Perspective

Correcting and Reconciling Errors

Reducing Defects

FROM TO“Portfolio Manager”/High Growth “Strategic Manager”/Return Optimization

Client Example of a FROM – TO ArticulationCLIENT EXAMPLE

Clients often articulate the culture aspiration in the context of a broader change agenda

1 The Culture FROM and TO

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We then identify the critical few behaviors and key influencers

First, we determine the few behaviors that matter most for each cultural theme– Where are the critical populations? (e.g., geographic, line of business, major functions, leadership

levels)– What are the strategic/performance imperatives in each? (analytically and experientially sound)– What specific behaviors need to change (From – To)?– What specific behaviors need to be reinforced?– How can key behavior changes be tracked?

Second, we identify and enlist the help of key influencers – Who are the “culture carriers,” “pride-builders,” and other “nodes” of influence in critical

populations?– What do these individuals do “differently” (that other “good managers” do not do) that influences

positive behaviors?– How can you enlist small groups of them as sources of positive influence and energy?– How can these small groups of positive influencers counteract the “negative influencers”?– How can their insight and capability be spread across and throughout the organization?

2 Critical few behaviors

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RelationshipsInvolves how employees relate to each other

Encompasses behaviors such as:– Methods for working across business units– Collaborating in ad hoc

and permanent teams

Leadership EffectivenessInvolves the ways that managers achieve optimal performance from teams

Encompasses behaviors such as:– Setting the standards/norms for accountability– Motivating peak performance – Using mistakes as teaching moments

Decision MakingInvolves the “ground rules” (formal and informal) for how decisions are made and who makes themEncompasses behaviors such as:– Setting the tone for authoritarian vs. consensus-

based decision making– Establishing approval norms

Information sharingInvolves how information isshared, both among peers and hierarchically

Encompasses behaviors such as:– Stopping for casual hallway chats to discuss

company news or share ideas– Providing direct vs. indirect feedback to peers

Work ExecutionInvolves how employees act in performing daily tasks on the jobEncompasses behaviors such as:– Looking for continuous improvement– Completing tasks on time– Honoring firm rules and guidelines

Critical behaviors typically fall into one of five categories


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Cultural aspirations must translate into behavioral specifics

EXAMPLE


Within each relevant culture theme, we will break down the existing culture and aspiration into specific behaviors

Relationships Decision Making Information Sharing Leadership Effectiveness Work Execution

Future Cultural Behavior Implications

Current Cultural Behavior Realities

Insights between customer channel departments is not

shared

Use regular cross- departmental insight

sharing sessionsCustomer Service

Oriented

Flexible

Culture Intervention Focus Attributes

Capture customer data sporadically and

incompletelyCapture and update CRM data at regular intervals

Prioritize cost management over

relationship management

Run all decisions through a “Client is Always Right”

lens

Reward service expediency

Reward service excellence

…

React to client account issues

Manage client account issues proactively

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After we understand the aspiration, culture themes to address, and the implicit behaviors, we can tailor an intervention program

A specific culture intervention program must be developed — the program typically includes a balanced mix of both formal and informal mechanisms – Interventions work best when incorporated into the “real” day-to-day work of the organization – The interventions selected must address the specific behaviors that the organization wants to alter– Interventions should be balanced and address both the rational and emotional side of the changes

being undertaken– All intervention mechanisms (formal and informal) should be reinforcing and consistent– The program should occur at various levels of the organization simultaneously and ensure cross-

organizational energy and support (e.g., it is vital that more junior-level employees see senior executives role-modeling the behavior types that they are being asked to perform)

Develop “pilot tests” to refine the mechanisms and ensure that both behaviors and performance results change as intended– Determine how to track early behavior changes using both metrics and informal observations– Modify mechanisms as necessary to reflect the early learnings– Compare with actual performance results when available

3 Culture Intervention Program

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To influence the critical behaviors, we utilize a reinforcing mix of both formal and informal elements

3 Culture Intervention Program

Formal ElementsVision, values, and strategy

Signal organization’s core commitments and aligns actions with a common view of the future

Capability system Defines core knowledge, tools, and processes and the corresponding behaviors crucial for execution

Reporting structures Enable and constrain particular ways of working within the “lines and boxes”

Decision rightsShape feelings of accountability and ownership and perceptions of organizational cohesion and bureaucracy

Business processes and metrics

Determine the operating behaviors and outcomes that are most important and should be attended to

Recruitment and selection programs

Conveys aspects of organization’s “personality” and signals individual attributes that are valued

Training and LD/OD programs

Imparts skills and ideas that enable behaviors and helps determine feelings of reciprocal commitment

Performance management

Communicates what is valued in terms of individual contributions, exerting a strong influence on behavior

Compensation Reinforces behaviors that are rewarded and shapes perceptions of fairness and levels of commitment

Internal communications

Call attention to events, priorities, etc., sending key messages through content and delivery choices

Policies Operating “do’s and don’ts” that formally guide how people are expected to operate

Informal ElementsTone set by senior leaders

Establishes a “drum beat” and shapes perceptions about espoused behavioral priorities

Behavior change proof points

Provide evidence that change is possible and/or gaining traction in the organization

Meaningful manager- employee connections

Foster personal, credible relationships that can align cultural perceptions up and down the organization

Knowledge transfer Transmit key culture messages within and beyond silos, spreading perceptions across the organization

Informal networks Sustain flows of trust, energy, and information that strongly shape cultural beliefs and behaviors

Peer-to-peer interactions

Influence perceptions and behaviors through informal dialogue and collaboration

Communities of common interest

Reinforce common identity and interests and shape members’ perceptions about the larger culture

Pride builder initiatives

Engage front-line leaders in efforts to define, support, and drive cultural priorities/key behaviors

“Culture Carriers” and change agents

Signal behaviors and ways of working that the organization values and help spread them locally

Artifacts Basic layout, resources, and aesthetics that subtly communicate the values of an organization

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Contents




Client examples

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A large insurance company’s culture intervention made wide use of formal and informal approaches

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Culture Intervention Program Outcomes

New company values embraced by

organization

Higher levels of employee

motivation and pride over time

Rising share price and performance

Culture Intervention: Insurance Company

3

1

2

Culture FROM and TO


Culture AspirationsBetter communication between senior leaders and employeesStronger business and individual accountabilityRelentless focus on serving customersCross-BU collaboration and information sharing

Redouble commitment to customer serviceHold one’s self accountable to new performance standards

Ensured that historically positive elements of the culture served as a foundation for the work

Linked new behaviors to responsibilities for which senior leader accountability could be tracked

Utilized formal and informal approaches to encourage and reinforce behavior changes– Strengthened formal approaches to improve

strategic alignment of behavior changes– Used informal approaches to increase

employee motivation and spread new behaviors virally

Case Example #1

CASE EXAMPLENew customer-focused strategy Leaner operating model More rigorous management system

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A balance between the formal and informal helped the company reinforce desired behavior changes to achieve results

Form

al A

lignm

ent Inform

al Motivation

Developed the new mission and values and related excellence awards

Refocused strategy and reorganized the company to focus on specific customer segments

Realigned 22 management processesRestructured the company twice to better align with the strategy and market

Developed ongoing Pride Builders network across 24 locations

Developed an “Unleashing the Pride” program and trained 400 managersIdentified key behaviors associated with building pride

Focused employees on helping the customer Improved customer service operations around customer satisfaction and efficiency

Senior Leaders

Work Force

Vision and

Values

Structure and

Process Purpose

Commitment and

Pride

Communities and

Networks

Strategy

ResultsImproved company performance and profitabilityHigher customer satisfactionStronger business and individual accountabilityIncreased employee engagement and pride

Select Formal and Informal Approaches Utilized

Case Example #1

CASE EXAMPLE

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We helped an industrials company change deal-making behaviors as a part of a larger process improvement initiative

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Significantly improved project pipeline due to

increased competitiveness

despite recessionary challenges

Increased overall company focus on the criticality of the

deal-making process

Culture Intervention: Industrials Company

3

1

2

Culture FROM and TO


Culture AspirationsAbility to leverage cross-organizational perspectives in solving difficult problems Create an environment of open dialogueCommitment to sharing information more effectively

Discuss deal risks openlyProactively and consistently draw on learning from past deals Have “master deal-makers”take the time to teach the next generation

Held up-front visioning sessions to identify behaviors to improve deal making

Analyzed deal-making exemplars to identify critical behaviors

Leveraged the existing culture to cast the performance aspiration as a win-win situation– Highlighted customer benefits of new process to

draw on culture of customer centricity– Leveraged sales force pride in their day-to-day

work by elevating their visibility to senior leaders in the decision-making process

Developed new processes, tools, and role modeling workshops to influence newly desired behaviors

Case Example #2

CASE EXAMPLERefined process for making go/no-go decisions on large capital projectsCost competitiveness amidst increasing industry consolidation

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Refined decision steps in deal-making process to increase accountability and ensure enterprise view

Introduced new roles (e.g., executive deal review committee, cross-functional deal team) to improve coordination and delivery

Developed new tools for deal strategy development and assessment/pricing of risk

Embedded processes and incentives for developing next generation of deal-making talent

Created platform for capturing deal-related learning and promoted informal information sharing

The approach focused on influencing behavior change from diagnosis through to execution

Collaborative visioning with client to define desired end state behaviorsInterviews with more than 40 company deal makers, project staff, and functional representativesQuantitative and qualitative analysis of recent deals to understand core drivers of profitability and riskGap analysis to identify critical behaviors as well as existing culture attributes to build on

Launched weekly meetings to review deals using new process, in which senior leaders and deal team members modeled new behaviorsSupported CEO and other senior leaders in reinforcing the importance of the new process and emphasizing the critical behaviorsConducted a series of pilots to ensure that new roles, tools, and processes were functioning properly– Early pilots revealed visible uptake of

new behaviors– Led to significantly reduced risk

exposure on key deals

Intervention Approach

Current Culture

Commitment to customerrelationships

“Joy of the hunt”

Pride andsenseof ownership

Bedrock focus onintegrity

“When we did the risk assessment, we had a compelling

conversation about real risks.”

Case Example #2

ImplementationDesignDiagnostic

CASE EXAMPLE

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An international telecom company addressed its culture using viral approaches as it dealt with deregulation

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Distinct performance

improvements (e.g., customer

satisfaction with rose from

38% to 52%)

Personal experiences with

Pride Builders was mentioned in CEO’s

letter to shareholders

Culture Intervention: Telecom Company

3

1

2

Culture FROM and TO


Culture AspirationsBecome a “sales and service”companyUse existing resources to support lasting behavior changeIntegrate process improvement initiatives into broader culture change effort

Probe for unmet customer needsInvolve other company resources at the right time to provide better solutionsUse expertise to guide customer

Targeted managers who exemplified motivational frontline management and developed scalable process for program growth

Integrate process improvement initiatives into broader culture change effort

Adopted viral approach at all levels of the organization to counter the notion that change was just another "corporate flavor of the month"

Created “Frontline Pride Community” to build the motivational skills of frontline managers

Case Example #3

CASE EXAMPLETransform from a regulated utility to a lean and competitive company Move from regional business model to a customer segment–based model

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Culture initiatives were spread virally using a network/community methodology

CASE EXAMPLE

Case Example #3

4

200414 members

2005500 members

20082500 members

Example: Growing a Pride Builder Community of Practice

2. Self-Sufficiency (grew from 50 to 150 members)

Core Team:CoordinatorGroup leadsFull-time admin

1. Formation (initial 10–15 PBs identified)

3. Preparation for Scale (150–300 PBs, with additional 100–500 participants)

4. Growth to Full Size (1,000+ PBs)

For more information please contact

Rutger von [email protected]

San FranciscoDeAnne [email protected]

Laird [email protected]

ZurichIlona [email protected]

LondonAshley [email protected]

New YorkNiko [email protected]

Traci [email protected]

Jon KatzenbachSenior [email protected]

Caroline KronleySenior [email protected]

Booz & Company is a leading global management consulting firm, helping the world’s top businesses, governments, and organizations.

Our founder, Edwin Booz, defined the profession when he established the first management consulting firm in 1914.

Today, with more than 3,300 people in 61 offices around the world, we bring foresight and knowledge, deep functional expertise, and a practical approach to building capabilities and delivering real impact. We work closely with our clients to create and deliver essential advantage.

For our management magazine strategy+business, visit www.strategy-business.com.

Visit www.booz.com

to learn more about Booz & Company.

©2010 Booz & Company Inc.

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booz&co perspective organizational culture final

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